Shares of this leading Navratna PSU working in the telecom infrastructure sector, surged more than 9% in Monday’s session after securing a major work order of INR 25 crore from Hindustan Petroleum Corporation Limited (HPCL). The stock hit an intraday high of INR 339.50, reflecting strong investor excitement around the latest development.
The company under discussion is RailTel Corporation of India. Let’s explore more details about the order.
Railtel-HPCL Order Details
RailTel announced on 23 March that it has received an INR 25.15 crore (excl. tax) work order from HPCL. This five-year rate contract effective from 1 April 2025 to 31 March 2030 involves the renewal of existing MPLS (Multiprotocol Label Switching) and ILL (Internet Leased Line) links and proposed new connections during the contract period subject to feasibility.
This order adds to RailTel’s growing order book which comes just after the company bagged another order of INR 16.89 crores from the Ministry of Defence for optical fibre cable laying work to be completed by March 2026. Earlier this month RailTel also got an order of INR 37 crore from Madhya Pradesh State Electronics Development Corporation.
Railtel IPO Post-IPO Performance
RailTel is an information and communications technology (ICT) infrastructure provider and is one of the largest neutral telecom infrastructure providers in India. The company launched its IPO on 16 February 2021, the INR 819.24 crore issue was subscribed 42.3 times. Railtel IPO listed with 29.1% gains.
Soon the IPO turned into a multibagger and reached its all-time high of INR 596.90 per share on 5 July 2024 reflecting an impressive return of 275% in three years. Currently, the stock has corrected 45% from its high and trading around at INR 326 per share.
Fundamentals and Financials
In Q3 FY25 RailTel reported 4.68% growth in standalone net profit at INR 65.05 crore with revenue from operations up 14.85% YoY at INR 767.62 crore. EBITDA was down 6.6% YoY at INR 121 crore which led to margin contraction from 19.4% to 15.8%.
The shareholder base is robust with around 5.1 lac retail shareholders holding a 19.85% stake. The government holds a 72.84% stake in the PSU.
Dividend and Analyst View
On 12 March 2025, RailTel’s board declared a second interim dividend of INR 1 per share (10% of paid-up capital) for FY2024-25 with a record date of 2 April 2025 and a payment date of 9 April 2025.
Interestingly despite strong fundamentals and recent order wins analyst coverage is limited. Both ICICI Securities and Investec have a ‘sell’ rating on the stock citing valuation and recent volatility.
Conclusion
RailTel’s recent contract win from HPCL underscores its growing footprint in India’s telecom and digital infrastructure sector. While the stock faces challenges in reclaiming its previous highs, the steady accumulation of government and private sector orders, coupled with consistent dividend payouts, makes it a stock to watch for long-term investors. However, with limited analyst coverage and recent price corrections, investors are advised to exercise caution and closely monitor upcoming earnings and order announcements.
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